The Transfer process and how to speed it up

1. Legal Quotes
“Love all men- except lawyers” [Irish proverb].”
“Lawyers are a learned class of very ignorant men.” [Erasmus, Dutch philosopher] “Justice denied anywhere deminishes justice everywhere.” [Martin Luther King]

2. Legal short
A lawyer is standing in a long queue. He suddenly feels a pair of hands kneading his shoulders, back and neck. The lawyer turns around and says, “What the hell are you doing?” The man massaging him answers, saying, “I’m a chiropractor, and I’m just practising while we wait.” The lawyer says, “Well, I’m a lawyer, but you don’t see me screwing the people in front of me, do you?”

3. Inspiring quotes
“Don’t count the days, make the days count”. [Muhammed Ali]
“All our dreams can come true – if we have the courage to pursue them.” [Walt Disney]
“Do not go where the path may lead. Go instead where there is no path and leave a trail.” [Ralph Waldo Emerson]

4. The transfer process and how to speed it up
So you’ve signed an Offer to Purchase your dream house, which has been accepted by the Seller, and you’re looking forward to cocktails at the poolside of your new home in two months time. Don’t bank on your transfer going through in eight weeks; there are many things that can delay the process, causing huge frustration and added costs.

Statistics show that it ordinarily takes between two to three months from the date of sale to the date of transfer of the property into the Purchaser’s name. In the event of the property being bond free, or where the transaction is a cash sale with no suspensive conditions, registration of transfer can be achieved sooner, assuming both the Purchaser and Seller sign the necessary documentation when requested by the conveyancers, costs are paid timeously and there are no unexpected hiccups on the way. On the other hand, registration may be delayed for months on end where the transaction is dependent on linked sales, or where the suspensive conditions in the Offer to Purchase are not timeously fulfilled.

As there are many aspects of the transfer process beyond the control of the conveyancer (there are ordinarily three different sets of attorneys in the transfer process: the conveyancer, or transferring attorney, the bond cancellation attorney (who cancels the Seller’s existing bond), and the bond registration attorney (who registers the Purchaser’s new bond over the property)), it is impossible to guarantee a definite date of transfer, although a fairly accurate date may be forecast. It is for this reason that many Agreements of Sale contain an occupation date, from which date the Purchaser shall pay the Seller an agreed monthly occupational interest until registration of transfer. Should transfer take place during the month, occupational interest will then be charged on a pro-rata basis.

Where the Agreement of Sale specifies possession (not occupation) before registration of transfer, it is important that the Purchaser be made aware that he must insure the property from the date of possession, as possession is linked with the passing of risk. Most insurances are linked to the registration of a bond. For this reason, possession usually passes on registration of transfer.

What does the transfer process entail?

Once the transferring attorney has been nominated (usually by the Seller), the attorney will :-

1. Communicate in writing with both the Seller and the Purchaser and will confirm in writing to the agent that he has been instructed to effect transfer.
2. Request FICA documents from both parties (copies of their identity documents, marriage certificates and antenuptial contracts, where applicable, proof of address, tax numbers, VAT numbers (if relevant) and, where transfer is being given or taken by a legal entity (e.g. a Company or Close Corporation), the relevant documentation and resolutions of that entity).
3. Request the Title Deed to the property from the Seller or, if the property is bonded, from the existing bond holder. It is important that the attorney requests the bond holder to cancel the bond as soon as possible after receiving the transfer instruction, as most banks require sufficient notice of your intention to cancel your bond (failure to do so can result in the bank charging the Seller a penalty for early cancellation).
4. Do a Deeds Office search to ensure that there are no interdicts or attachments on the property. The transfer documents can then be drawn and the parties contacted to sign the requisite documents.
5. Write to the Local Authority to assess outstanding rates on the property and to obtain a Rates Clearance Certificate which will be lodged with the transfer documentation in the Deeds Office. The rates year runs from 1 July to 30 June of each year and the attorney will collect pro-rata rates from both the Seller and the Purchaser. The Purchaser is ordinarily obliged to pay the rates three months in advance from the anticipated date of occupation/transfer.
6. Collect transfer duty from the Purchaser which will be paid over to SARS. The transfer duty receipt must be lodged with the transfer documents.
7. Ensure that all the transfer documents are correctly drafted and ready for lodgment at the Deeds Office, and where there is a linked transaction (the cancellation of the Seller’s bond, the registration of the Purchaser’s bond, or a linked transfer), ensure that all linked parties lodge their documents at the same time, so transfer can take place simultaneously.
8. If the transfer is a sectional title transfer, liaising with the body corporate or home owners association to obtain a levy clearance certificate and a consent to transfer (if the title deed contains a restriction against transfer without the prior written consent of the body corporate or home owners association).
9. Checking that the Seller has supplied valid electrical, beetle, plumbing and gas certificates.
10. Send final accounts to both parties reconciling all payments received and made. If the balance of the purchase price has not yet been received or secured, the attorney will request the Purchaser to pay same. Transfer will only be registered once the full purchase price has been secured and all costs have been collected.
11. Contact the Seller, the Purchaser and the agent on the date of transfer to confirm that transfer has been registered. Where an error occurs in the documentation, the Deeds Office will reject the transfer which will result in a delay of approximately ten days (the average time period between lodgment and registration in the deeds office.)

Factors that can delay the transfer process

1. The non-availability of either party to sign the transfer documents.
2. Delays in the fulfilment of suspensive conditions contained in the Agreement of Sale, e.g. where the financial institution delays the matter by not approving bond finance timeously.
3. The financial institution delays the transaction by not delivering the Title Deed to the attorneys timeously.
4. A delay in the issuing of a Rates Clearance Certificate.
5. Complications in a linked transaction.
6. Delays relating to guarantees e.g. where the Purchaser is a government employee.
7. The Purchaser not paying his transfer duty and costs promptly, or not paying the balance of the purchase price when required.
8. Transfer documentation being rejected at the Deeds Office.

How can transfer be speeded up?

1. By the estate agents :-

1.1 Supplying full and clear instructions in the Agreement of Sale.

1.2 Ensuring that the Offer to Purchase is complete i.e. giving full contact details for both the Purchaser and the Seller, their addresses and identity numbers and other relevant information.

1.3 Enclosing, as a matter of course, copies of the parties’ FICA documents.

1.4 In the event of either party being a legal entity, the following documentation should be collected by the agent and forwarded to the conveyancers :-

1.4.1 Trust Copy of the Trust Deed

1.4.2 Company Copies of the Memorandum of Association and Certificate of Incorporation of the Company

1.4.3 Close Corporation Copy of the Founding Statement or amended Founding Statement (CK1 / CK2 Forms)

1.5 If the transfer is linked to another transfer, the agent should clearly indicate this in his instructions to the attorneys.

1.6 If the property is bonded, the name of the financial institution and the relevant bond account number.

2. By the conveyancers :-

2.1 On receipt of the instructions, immediately doing a Deeds Office search and obtaining a copy of the Title Deed from the Deeds Office enabling them to draw the documents.

2.2 Immediately issuing a letter of cancellation to the relevant financial institution.

2.3 Applying for a Rates Clearance Certificate immediately to ensure the timeous obtaining of same.

2.4 Establishing when both parties are available to sign the transfer documentation.

2.5 Requesting timeous payment by the Purchaser of transfer duty and pro-rata rates.

2.6 Liaising with all parties to the transaction, including the agent.

2.7 The correct and accurate drafting of the transfer documentation.

3. By the Seller:-

3.1 Selecting an experienced and competent conveyancer (this is probably the most important factor).

3.2 Providing the conveyancer with full FICA documentation on request.

3.3 Obtaining valid electrical, beetle, plumbing and gas certificates timeously.

3.4 Ensuring your rates are paid up to date.

3.5 If there is no bond, make sure you have the original title deed of the property.

3.6 If there is a bond, ensuring your bond payments are not in arrears and that you the bank sufficient notice of cancellation of the bond to avoid the payment of penalties.

3.7 If the property is sectional title, make sure you have a copy of the latest financial statements of the body corporate, including the budget. Obtain also details of any special levy imposed by the trustees and copies of the minutes of the Annual General Meeting (“AGM”) for the last few years. Request copies of the management and conduct rules of the body corporate. Ensure your levies are paid up to date. If the title deed of the property requires that the body corporate or home owners association consent to the transfer in writing (which consent must be lodged with the transfer documentation), make sure there is no delay in getting this consent.

3.8 Making the necessary plans to move out of the property on the day before transfer is registered, or on the agreed date.

4. By the Purchaser:-

4.1 Signing all documentation, both transfer and bond documents (if applicable), on request.

4.2 Providing the conveyancer with full FICA documentation on request.

4.3 Applying for bond finance immediately on signature of the Offer to Purchase, or arranging a pre- approved bond before signing the Offer to Purchase.

4.4 Paying all costs and the deposit, and the balance of the purchase price on request.

4.5 Synchronising occupation dates with the Seller and conveyancers.